Robatech Midwest, Inc. v. Marcel Leuthner & Robatech United States, Inc.

ROBATECH MIDWEST, INC., Plaintiff, v. MARCEL LEUTHNER and ROBATECH USA, INC., Defendants.

Case No. 14-CV-1230-JPS

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN

March 17, 2015

ORDER

On August 29, 2014, the plaintiff commenced this action in Racine County Circuit Court. (See Docket #1, Ex. 1). The defendants then removed the matter to federal court, after which it was assigned to this branch. (Docket #1). The defendants moved to dismiss the complaint (Docket #3, #7), but agreed to allow the plaintiff to amend its complaint but reserved their arguments in favor of dismissal (Docket #17, #21). The Court, therefore, denied the original motions to dismiss and allowed the plaintiff to amend its complaint. (Docket #23). The plaintiff amended its complaint, whereafter the defendants separately moved to dismiss the amended complaint. (Docket #24, #25, #27). The defendants' motions to dismiss are now fully briefed and ready for a decision. (Docket #26, #28, #29, #30, #32, #33).

1. BACKGROUND

The Court begins by providing some background in this case. First, it describes the parties. Second, it describes the events leading up to this lawsuit. Third, it describes the defendants' motions to dismiss.

1.1 Parties

The plaintiff, Robatech Midwest (hereinafter "the plaintiff"), is a Wisconsin-based distributor of glue application systems. (Docket #24, ¶¶ 1, 9).

The plaintiff is owned and controlled by Integrated Glueing Technology, Ltd., which operates from the United Kingdom. (E.g., Docket #24, ¶ 11; Docket #30 at 2).¹ Integrated Glueing Technology distributes glue application systems in the United Kingdom. (Docket #30 at 2). Integrated Glueing Technology is not a party to the instant lawsuit.

Both the plaintiff and Integrated Glueing Technology distribute glue application systems manufactured by Robatech AG. (Docket #24, ¶ 9; Docket #30 at 2). Robatech AG is based in Switzerland and controlled by Marcel Meyer, a citizen of Switzerland. (Docket #24, ¶ 10). Neither Robatech AG nor Mr. Meyer are parties to the instant lawsuit.

Mr. Meyer also controls Robatech USA, Inc. ("Robatech USA"),² which is a defendant in this case. (E.g., Docket #24, ¶¶ 3, 10). Robatech USA is incorporated in Georgia and appears to be the primary distributor of Robatech products in the United States. (E.g., Docket #24, ¶¶ 3, 10, 13; Docket #30 at 2-3). It seems that Robatech USA is capable of both: (1) independently and directly distributing Robatech products to end users; and (2) distributing Robatech products to sub-distributors, such as the plaintiff, for resale pursuant to contractual relationships between Robatech USA and the sub-distributors. (See Docket #30 at 2-3). (This, it would seem, is how the plaintiff became the primary distributor of Robatech products in the Midwest.).

The remaining defendant is Marcel Leuthner. (Docket #24, ¶ 2). Mr. Leuthner is the President and CEO of Robatech USA. (Docket #24, ¶ 14). He is a citizen of Germany, but lives primarily in Georgia, where he operates Robatech USA. (See Docket #24, ¶ 2; Docket #1, Ex. 2, ¶¶ 1-4). The plaintiff appears to allege that Mr. Leuthner controls Robatech USA in theory but acts entirely at the direction of Mr. Meyer. (See Docket #24, ¶¶ 12-15; Docket #30 at 2-3).

1.2 Precipitating Events

This lawsuit is the by-product of an ongoing dispute between the parent companies in Europe. Robatech AG and Integrated Glueing Technology, through their owners, are currently engaged in contentious litigation in Switzerland (the "Swiss Litigation"). (Docket #24, ¶¶ 12, 13). In connection with the Swiss Litigation, Mr. Meyer threatened to use Robatech USA to cause the plaintiff to lose sales in the Midwest if Integrated Glueing Technology would not settle the Swiss Litigation. (Docket #24, ¶ 13).

Thereafter, Robatech USA, at the direction of Mr. Leuthner (whom, the plaintiff asserts, was acting at the direction of Mr. Meyer), began to limit the plaintiff's ability to sell products as a sub-distributor. Allegedly, Robatech USA did so in several ways.

First, it cabined the plaintiff's sales area. Previously the plaintiff had made sales outside of the Midwest; but, after Mr. Meyer's threat, Robatech USA notified the plaintiff that extraterritorial sales would no longer be allowed and that Robatech USA would strictly enforce territorial limits. (Docket #24, ¶¶ 24-25). Despite this warning, the plaintiff made an extraterritorial sale, which Robatech USA, through Mr. Leuthner, informed the plaintiff was a material breach of the distributorship agreement. (Docket#24, ¶¶ 26-27). Thereafter, Robatech USA refused to approve any extraterritorial sales. (Docket #24, ¶¶ 29-32).

Second, Robatech USA facilitated sales by the plaintiff's competitors. The plaintiff alleges that Robatech USA, through Mr. Leuthner, has disclosed pricing and customer information to the plaintiff's competitors. (Docket #24, ¶¶ 35-38).

Third, Robatech USA has imposed a credit limit on the plaintiff. The plaintiff alleges that Robatech USA, in contravention of the distributorship agreement and prior practice, has imposed a strict credit limit on the plaintiff. (Docket #24, ¶¶ 41-45).

Fourth, Robatech USA has increased its prices. The plaintiff alleges that Robatech USA, in contravention of the distributorship agreement, increased prices more than once in 2014. (Docket #24, ¶¶ 47-50).

Fifth, Robatech USA has denied the plaintiff access to the annual seminars hosted by Robatech USA and/or Robatech AG, which results in lost business opportunities and diminished reputation in the industry. (Docket #24, ¶¶ 51-55).

1.3 Motions to Dismiss

In light of these activities, the plaintiff filed suit against Robatech USA and Mr. Leuthner. (See Docket #1, Ex. 1). In its amended complaint, the plaintiff asserts the following claims against the defendants:

(1) violation of the Wisconsin Fair Dealership Law, Wis. Stat. § 135.01, et seq. (Docket #24, ¶¶ 56-62);

(2) injury to business, Wis. Stat. § 134.01, et seq. (Docket #24, ¶¶ 63-71);

(3) breach of contract (Docket #24, ¶¶ 72-77);

(4) promissory estoppel (Docket #24, ¶¶ 78-86);(5) declaratory judgment (Docket #24, ¶¶ 87-93); and

(6) breach of implied duty of good faith and fair dealing (Docket #24, ¶¶ 94-107).

The defendants have filed separate motions to dismiss. Mr. Leuthner, alone, asserts that he is not subject to personal jurisdiction in Wisconsin and that, therefore, the matter must be dismissed as against him. (See, e.g., Docket #26). Meanwhile, Robatech USA (seemingly in conjunction with Mr. Leuthner) separately argues that the entire complaint must be dismissed pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure because the parties' contract deprives the Court of jurisdiction to hear this case and/or establishes that the action is mis-venued, as the parties' contract requires that the action be venued in the Superior Court of Cobb County, Georgia. (See, e.g., Docket #27 at 4-7). In the alternative, they argue that the plaintiff's second, fourth, and sixth claims—injury to business, promissory estoppel, and breach of implied duty, respectively—must be dismissed pursuant to Rule 12(b)(6). (Docket #27 at 8-24).

2. ANALYSIS

The Court will first address the defendants' jurisdiction and venue arguments before turning to their specific claims-related arguments.

2.1 Jurisdiction- and Venue-Related Arguments

Of course, the jurisdiction and venue related arguments present the threshold issues. For instance, if the Court were to find that the parties' contract, in fact, called for exclusive jurisdiction in the Superior Court of Cobb County, Georgia, then the Court would be obliged to dismiss the case in its entirety, with no need to reach Mr. Leuthner's personal jurisdiction arguments or the arguments related to the specific claims. Likewise, even if the Court rejects the defendants' contract-based argument, it may stilldismiss all of the claims against Mr. Leuthner for lack of personal jurisdiction, in which case the Court would not need to consider whether the specific claims are appropriate as against Mr. Leuthner. Therefore, the Court will address those two questions, in that order, before turning to the defendants' Rule 12(b)(6) claims.

2.1.1 Defendants' Rule 12(b)(2) and Rule 12(b)(3) Arguments in Favor of Dismissal on the Basis of Terms in the Parties' Contract

The defendants' primary argument in favor of dismissal of this entire case stems from terms in the parties' contract. The parties' distributorship agreement includes the following clause:

APPLICABLE LAW. The parties acknowledge and agree that this Agreement was negotiated, made and entered into by the parties in Georgia. The parties agree that the Laws of the State of Georgia have exclusive jurisdiction over any dispute that may arise under, or in connection with, the enforcement of interpretation of this Agreement. Distributor waives any objection based on inconvenience of venue and any objection to venue or forum for such claim or cause of action, and hereby submits to jurisdiction and venue in the Superior Court of Cobb County, Georgia.

(Docket #9, Ex. 1, ¶ 10).³ The defendants argues that this clause clearly requires that the action be venued in the Superior Court of Cobb County, Georgia, thus requiring dismissal pursuant to Rule 12(b)(2) or Rule 12(b)(3). The plaintiff disagrees, arguing that the defendants are misreading the clause.

The Court begins with some basics about forum selection clauses.

The existence of a forum selection clause raises a series of potentially litigable questions. First, is the agreement enforceable? Second, if so, does the clause apply to the dispute at hand? Third, if so, is the clause mandatory or merely permissive—that is, does the clause establish the chosen forum as exclusive to others? Fourth, if so, does the clause mandate litigation in a federal or state or foreign court?

14D CHARLES ALAN WRIGHT & ARTHUR D. MILLER, FEDERAL PRACTICE AND PROCEDURE § 3803.1 (4th ed. 2014) (h...